If you’re having trouble motivating yourself to start saving, money-saving challenges may be the answer. These have recently been getting more popular, and for good reason.
Money-saving challenges make saving money a less dreary task. They add an element of interest to saving by providing fun rules and tickling your competitiveness (especially if you take it up as a competition with a friend or family member).
The best way to see how this works is to take on a money-saving challenge yourself, of course. Here, we’ll show you 5 of the most popular and effective ones you can try.
#1. The No-Spend Weekend Challenge
This is easily among the most well-known money-saving challenges at the moment. That’s probably because it’s so simple and yet can make such a big difference.
The idea is to pick one weekend out of every month as a “no-spend weekend”. On the day itself, do exactly that: get by without spending a single dollar.
An exception has to be made for expenses you absolutely can’t avoid, of course. For example, if your utility bills are due that day, you have to pay them or end up spending more later due to tardy fees. That wouldn’t help you save at all!
But for everything else, just avoid spending anything. Don’t buy petrol for your car, don’t order food from eateries or dine out, don’t shop for a new shirt, etc.
Part of the challenge comes from you being forced to find workarounds: if you have to go out, you’ll probably have to walk to your destination, for example. Commuting still involves spending money, after all.
You may be astonished by how much you can save this way. It’s because a lot of people spend more on weekends, whether they realise it or not.
#2. The Envelope Challenge
This is another popular and easy challenge that can help you save money. For this one, you just need a stack of envelopes and a pen.
Originally designed for those who prefer a less structured method of saving, this challenge requires you to write amounts on the envelopes and then put the cash corresponding to those amounts in them.
You can have as many envelopes as you want and write just about any amount on each one of them. You can even write $10 on one and $100 on another.
All that matters is that you fill up all the envelopes with the cash corresponding to the numbers written on them by the end of the saving period.
Note that you can set the saving period based on your needs: you can give yourself 6 months to fill them… or even a year, for example.
The idea is that each envelope you fill helps you hit a goal, giving you a sense of accomplishment. That can motivate you to continue saving, as you continuously get small gains that add up.
Because this is designed to be a flexible saving scheme, you don’t need to fill a particular envelope on a particular day or month. Just choose which one you want or can fill at a particular time.
If you have an envelope with “$100” written on it, for example, you aren’t compelled to fill it on, say, January. You can do it any month (or even week) of your saving period, as long as it gets filled.
This lets you decide when to save more and when to save less. If money is tight one month due to higher bills, for instance, you can just fill up an envelope with one of the lower specified amounts.
A good way to start this saving challenge is to go with fewer envelopes and a shorter saving period, as a test run.
For example, get 2-4 envelopes, labelling half of them with smaller amounts (like $50) and half with larger amounts (like $200-$300).
Then give yourself something like 3-4 months to fill them all.
For best results, avoid “cheating” with this challenge: you may find yourself either struggling to complete it or barely saving anything. For instance, it wouldn’t make sense to give yourself 2 to 3 months just to fill an envelope requiring only $50!
#3. The Holiday Fund Challenge
This is best done at the start of every year. The goal is to ensure that you have enough money for the year’s holidays to buy gifts and even spend on a nice Christmas dinner.
Start by getting the sum you spent on holiday gifts and food last December. Now divide that figure by the number of weeks left in the year.
That will tell you how much money you need to save per week to complete this challenge. You may find yourself setting aside anything from $20 to $50 per week.
The beauty of it is that if you complete the challenge, you won’t have much to worry about once the holidays do arrive. You’ll already have the money to cover expenses for them!
Note that you can do this for other holidays too. For instance, instead of working towards the Christmas holidays, you can save money for Chinese New Year instead - just be sure to calculate how much you need for red paper packets and reunion dinner!
#4. The Hobby Swap Challenge
Most of us have hobbies that cost us money. It could be the cost of buying materials for model aeroplanes, the cost of new books for those who like to read, and the like.
For this challenge, you need to find a way to either swap costly hobbies with new ones that cost nothing... or swap the parts of the hobby that cost you money for things that cost you nothing.
For example, you can try a new hobby like jogging around your neighbourhood instead of hitting the gym, as this costs nothing. Or for readers, you can switch to borrowing books from friends and libraries instead of buying them.
Do this for several months (3-4 is a good number) and save all the money you would have spent on your hobbies otherwise.
#5. The Spare Change Challenge
Most of us are already familiar with the idea of saving spare change. A way to improve this money-saving challenge is to set a slightly higher-than-usual threshold for what you consider “change”.
For example, you could consider certain banknotes “change” as well, and thus save them instead of spending them. You might even class $5 bills as “spare change” and save all of the ones you get in a box or jar.
At the end of the year, you’ll likely be astonished by how much money you can put together this way.
After These Challenges: More Ways to Save
If you do manage to complete all of the challenges above, congratulations! You’ve probably put away a decent bit of money in your savings account by now.
You should capitalise on your success by continuing to save and challenging yourself to develop even better financial habits. Should you need help with that, you can contact us.
At Financial Fortress, we’ll put you in touch with advisors who can help you plan your next money-saving or wealth management steps.
By teaching you the fundamentals of financial planning, the advisors will help you improve and secure your finances further.
Get started by reaching out to us today.
Written in collaboration with our financial advisory partners at Virtus Associates.